1. They once sold me house insurance for $350 a year.

2. I always felt . . .

that Obama agreed to the bailout while holding his nose, and only because he feared that not to do so would lead to a full-blown depression both here and even abroad. I wonder now if he feels he made a mistake.

20. And may they flat-out fail next time. Propping up institutions like AIG is another

reason this country is consistently in such a mess. And, "we the people" often have little voice. I would have let them fail, as painful as it might have been, but in the long run we would have been stronger with diversification. NO institution should be allowed to grow so big it's too big to fail. That, is an absurd way to manage an economy. ... diversification adds strength. And with AIG back ... it will happen again.

13. No good deed goes unpunished.

7. It's actually worse than that.

AIG sold credit default swaps on a huge number of mortgages. If the mortgage goes into default, the insurance would pay off. AIG basically bet their company that the housing market would never, ever go down.

Wall Street wrapped those swaps into more mortgage bonds, on which AIG insured with yet more swaps. And it was all legal.

As soon as property values went down mortgages went into default, AIG ended up having to pay off all those CDS on thousands of subprime mortgages, all at once. It took no time at all for them to have a larger than 50 billion dollar hole.

The guy who was most responsible for this was Joseph Cassano. Basically one guy crashed the whole world economy.

Recommended reads:
The Big Short: Inside the Doomsday Machine, by Michael Lewis. Tells the story of several people in the background who saw what was happening. A really great read.

Too Big to Fail by Andrew Ross Sorkin. History of the Lehman failure and the TARP bailout. Not as readable as Lewis, and not exactly portraying a liberal POV. But it contains essential info on what went down after Bear Stearns fell.